Technology enablement in IT sourcing governance is inevitable in today's outsourcing landscape considering the complex deal size, multi geography, multi sourcing and multi vendor environments. IT sourcing governance is critical to managing complex outsourcing arrangements, different geographies, different business units and multiple providers. Full-fledged sourcing management governance suite solutions are being offered from both IT service provider and third party software vendors. Governance solutions or products are built either focused on customer organization of outsourcing (buyer) or service provider organizations. However the tools built for service provider organizations focused either on service delivery management and governance or program management and governance with respect to vendor relationship management. The outsourcing and off shoring market continues to grow, with the addition of new technologies, services, geographies, new delivery models, as well as an increasing focus from regulators. Though large numbers of customer organizations are increasingly aware of and understand the importance of sourcing management and governance to realizing cost savings from outsourcing, mitigating the applicable risks and minimizing the value leakages. However sourcing management and governance process maturity and practices have not improved to a greater extent considering the complexity of sourcing landscape. There is significant and ample room for improvising the IT sourcing management and governance, not only in terms of investment in governance tools and resources, but also in managing the vendor relationships.
Governance tools available from external suppliers and software product vendors typically gravitate towards either performance management or program management or service delivery management or contract management or financial management arena. Componentized solutions are developed to meet the specific functional aspects like Contract Management System (CMS), Service Level Agreement (SLA) management (Help Desk, SLA tracking and reporting), governance (operational, service delivery management, program management) etc. Certain governance tools are predominantly developed exclusively for specific market segment or geography or exclusive IT service segments like BPO or shared services. These governance tools work well, but the primary disadvantage of such governance tools are clustered around managing functions closely associated with performance or SLA or problem management (Help Desk Service Management) or contract management, or spend analytics arena and are not capable to proactively identify and mitigate risk and bring value realization throughout the sourcing lifecycle. In addition, such governance tools do not provide entire spectrum of governance functionalities with respect to IT sourcing management value chain.
There are inappropriate alignment issues emerging between demand and supply organizations (client and service provider) in today are IT outsourcing considering the multi geography, multi vendor, multi sourcing environments. Some of the service provider solutions or solution frameworks cannot be leveraged outside their client relationship boundaries in a multisourcing environment. All service providers either have their own governance software tools, based on both custom or home-grown and commercial applications to manage the client relationships. While service provider tools play an important role in supporting outsourcing governance, typically client organizations will need to have their own tools, particularly if they are managing multiple outsourcing efforts (region, country, business units, IT services) employing multiple vendors. The client organizations typically use their own set of tools or products for financial management, procurement/sourcing, contract management and SLA management etc. Usage of these tools is widely varying from client to client. Even if some of the governance tools claimed to have specific governance functionalities, it would be difficult to implement and replace the existing core functional systems in financial management, procurement management, contract management, program management and service delivery management aspects cut across operational, tactical and strategic aspects. No single governance tool or platform comprehensively covers either the core functionalities or the entire bandwidth of functions within IT sourcing management and governance value chain or cut across different aspects of IT services.
There are some product vendors in the sourcing management & governance market place providing software with functionality that supports different pieces of an outsourcing governance value chain such as service delivery management and governance or program management and governance etc. For instance, one of the existing vendor solution frameworks is being used for program management and governance to manage the client's relationship regardless of the type of IT services or IT sourcing initiatives and client's business regions. However, this solution framework cannot be leveraged from the client organization as it involves multi sourcing initiatives and therefore the underlying solution framework, methodology and the process cannot be used outside the service provider boundary lines. Additionally, the solution framework does not have the capability of managing, monitoring and reporting of value management, contract compliance audit, contract evaluation analysis and customer satisfaction management on sourcing governance.
Another existing solution framework provides a system for providing enterprise level platform that enables collaborative business service delivery and governance through access to underlying infrastructure for connected customer-vendor systems. This solution mainly brings together various point solutions with intent of providing a single window that enables access to the underlying infrastructure for a connected customer-vendor IT operations. The system also focuses on supplier standpoint revolving around service delivery management and governance aspects. The downside to this solution is that the system does not disclose functional aspects of contract governance or contract obligation management. Further, the system does not provide contract compliance audit, contract evaluation analysis, customer satisfaction management on sourcing governance, IT spend visibility management reporting to enable financial control, compliance, governance with contractual commitments and other internal and external requirements.
There are several other point solutions developed exclusively from certain functional aspects rather than from IT sourcing governance aspects. For example, evaluating the supply base risk; there is a componentized solution which evaluates supplier risks and issues on a continual manner which is essential for today's sourcing management and governance stand point. There is a wider functional gap or differences between enterprise GRC solutions and ITSM focused GRC solution in today's market place. This function would generally be monitored as a part of the client's Enterprise Risk Management (ERM) solution rather than from specific aspects of sourcing governance. Further, the system does not monitor, manage, track and report the other aspects of sourcing governance between the customer and the vendors.
Some of the below mentioned products known to us which deal in addressing the some aspects of sourcing governance are as mentioned below.
EquaSiis's product “EquaSiis Enterprise” available at: http://www.equasiis.com/software-plus-intelligence/equasiis-enterprise describes a collaborative solution which is designed specifically for teams that govern critical business services through outsourced or shared services delivery models. It also automates the more routine transactional components of governance while providing a rich suite of analysis and decision-support tools.
Enlighta's product “Multi-vendor governance tool” available at: http://www.enlighta.com/products/enlighta-govern-for-multi-vendor-govemance/overview.html describes about a platform provides the comprehensive support for the multi-vendor governance for globally sourced (i.e. internal, captive or outsourced) services.
However, there exists a need to have a integrated system that not only simplifies the adoption and implementation of enhanced governance service management processes but also to provide entire spectrum of governance functionalities with respect to IT sourcing management value chain. The collaborative capability of the system under effective governance is expected to enrich stakeholders' performance across both client and vendor organizations resulting in efficient and effective governance, expected business outcomes, enhance the supplier relationships, program management office, minimizing and mitigating the risk and value leakage proactively.
Hence, it can be seen that there is a need for an integrated, effective tool for IT sourcing management and governance arena that would bring a balanced view of governance, enhancement and optimization of customer-vendor relationship through-out the contract or sourcing lifecycle. The governance solution of the present invention is primarily built from the customer perspectives considering multi sourcing, multi vendor and multi geography environments as the number of service provider or IT services increases, the complexity of managing the both the vendors and the client business units is very critical. This requires a consistent governance process mechanism across the sourcing management value chain. The system would include a sourcing management governor for managing, monitoring, tracking and reporting effective governance between a customer organization and vendor organizations throughout the sourcing lifecycle. This system would enable the customer organization to build governance capabilities in terms of governance process improvements and optimizations cut across various key process areas including contract management, financial management, relationship management, performance management, value management and risk and compliance management. Further, the system would provide effective decision management and reporting capabilities enabling governance of the sourcing relationships, managing and mitigating effective risk management. Moreover, the system would improve the overall performance level of the outsourcing governance process and the sourcing management arena cut across procurement, sourcing and vendor management, financial management, audit, legal and IT departments regardless of the geography, country and business unit they operate upon. In addition, this system would provide client organization improvised and effective governance capabilities over a period of time, to realize the expected cost savings, mitigating the applicable risks, minimizing the value leakages from the sourcing initiatives and effective vendor relationship management throughout the sourcing life cycle.